[ferro-alloys.com]Galaxy Resources boss Anthony Tse has declared the company’s Argentine brine landholding as its future flagship project and says it is critical the lithium miner finds the right partner and the best deal to develop it, regardless of how long it takes.

Mr Tse was responding to questions from analysts on a conference call yesterday after the company’s December quarter report failed to shed any light on when Galaxy would appoint a partner for its $US376 million Sal de Vida project.

Galaxy has already pushed back a self-imposed deadline to appoint a partner by the end of the end of last year.

Yesterday it confirmed it had received several offers from potential strategic partners, which it was evaluating in detail.

“Negotiations continue to progress, so the board has resolved to formally extend the process timeline to ensure proper consideration is given to the strategic merits and proposed terms and structures of each of the offers,” the company said.

Mr Tse said developing a brine project was a five-to-six year process and if it took the company an extra six months to find the right partner and get the right deal structure, then Galaxy would be happy to spend the extra time.

“This world-class asset is going to be our flagship going forward and so that’s why in the whole scheme of things, if we end up taking an extra 3-6 months or whatever it is, to actually to get that recipe right in terms of the partnership and the development plan for the project, I think that’s where we want to be,” he said.

Galaxy’s chief financial officer Alan Rule stressed that the company would only engage a partner if the final terms of any deal properly recognised the fundamental underlying value of Sal de Vida and the partner could add value to the project either through technical and/or financial input.

Mr Tse said Galaxy would have $US257 million sitting in its balance sheet when the $US280 million sale of its non-core northern tenements at Sal de Vida to South Korean steel giant POSCO completed.

He said a January shutdown of the local mining court in Argentina and a backlog of applications for tenement transfers was delaying the final release of the cash but the company’s documentation was in order.

“In the unlikely event that we’re not satisfied... we obviously have the optionality to consider other forms of financing,” Mr Tse said.

“But at the moment, we’re still working on continuing those discussions with the counterparties.”

Shares in Galaxy tumbled 6.3 per cent to a near 52-week low of $2.10 as investors reacted to weaker than expected quarterly production from its Mt Cattlin mine near Ravensthorpe.

Mr Rule said the 33,780 tonnes of spodumene concentrate produced during the quarter was higher than the third quarter but lower than expectations because of lower ore grades, reduced recovery and lower plant utilisation.

However Galaxy forecast an improved March quarter of 40,000-45,000t and gave full-year guidance of 180,000-210,000t for the full calendar year with ore from higher grade areas coming online and the completion of its yield optimisation project.

The company attributed margin compression in the fourth to higher costs of production, but the company expected costs to ease as production increased in the year ahead.

Earlier this week, the company reported a 42 per cent increase in the Mt Cattlin resource to 16.7Mt, at 1.28 per cent for 214,400t of lithium oxide.

（The West Australian）

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